Bob Harris said:
To expand on the first reply.
The XP encryption is tied to the user account. Not the user name, not the
user password, but the account itself.
If XP has to be re-installed, even if you create the same user with the
same password, all XP-encrypted files will be UN-readable.
That is the importance of saving the "EFS certificate". With it you have
a chance of reading the files. Without it you don't.
The third-party encryption tools mentioned in the other replies have a
more traditional password system, and are not tied to the user account.
They offer strong encryption, if you really feel that you need that (sort
of CIA level), as opposed to casual encryption (to keep kids out). But,
as with any password based system, you need to pick a password that is (1)
fairly long, (2) not something obvious like your name, birthdate, etc, (3)
something you can remember, or feel comfortable writing down somewhere
that you can find later.
A possible alternative to encryption is to save the files on removeable
media (e.g., USB stick) and hide/lock that away.
Remember, the best approach to security depends on whom are trying to
prevent accessing the files.
Since the OP did not say who that "someone" might be, we might as well
assume that it is a reasonably capable attacker. As far as I know, EFS also
uses strong encryption algorithms but a lot of users have reported problems
with restoring user accounts and exporting certificates. Axcrypt also offers
a "weak" encryption level without using a digital key and just a passphrase
but I would not consider bothering to use it. As far as selecting a
passphrase, it should just be a "random" string of upper and lower case
letters,digits and other characters including spaces.
Besides the third-party encryption tools mentioned there are many others,
including proprietary source-code offerings. I have not tried any of them
but they may also be worthwhile at least for a trial installation. If I had
XP Pro instead of XP Home I might try to experiment with EFS first like many
others who have posted in this and other NGs, often with puzzlement and
confusion with unexpected results.